Will Inflation Spark Protests in Africa?
The war in Ukraine has led to rising costs for fuel, food, and fertilizer from Ghana and Nigeria to Egypt—and it could trigger instability.
Welcome to Foreign Policy’s Africa Brief.
Welcome to Foreign Policy’s Africa Brief.
The highlights this week: Ethiopia declares humanitarian truce in Tigray war, the United States seeks to reassure Egypt and Morocco on Iran, and Togo expands its digitization plan.
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Ghana Confronts Rising Inflation
Russia’s invasion of Ukraine triggered a shock to commodities markets globally and has sent the prices of essential goods such as wheat and oil skyrocketing across Africa. Ghana has seen inflation rise to 15.7 percent amid a hike in fuel prices and a near 16 percent loss in the value of its currency, the cedi, against the dollar this year. In a bid to cushion the economic bite, the Ghanaian government last week announced a series of fiscal measures to sustain public finances.
“If we look at the world today, there are two clear forces shaping global events: the impact of the novel coronavirus pandemic and the crisis in Ukraine,” Ghanaian Finance Minister Ken Ofori-Atta said during a press briefing in Accra, Ghana’s capital. “As well as threatening global peace, the war in Ukraine has had a far reaching impact … and Africa is likely to be amongst the worst hit outside of Ukraine,” he added, referring to the impact on world economies.
The Bank of Ghana raised base interest rates for the second time since November 2021, following similar moves in Britain and the United States. Over the weekend, President Nana Akufo-Addo approved a 50 percent cut to subsidized fuel for all ministers and heads of government institutions effective from April. Salaries of ministers will also be trimmed by 30 percent until December, alongside a moratorium on foreign travel for officials without prior approval and $2 billion worth of measures injected into the economy to stem the cedi’s decline.
But the financial burden on Ghanaian wallets is immediate. The national taxi drivers’ union has threatened to strike over soaring fuel costs. Farmers are reportedly reducing their crop production due to the high costs of essentials. Russia is the world’s top fertilizer exporter, and a bag of fertilizer is being sold at roughly 380 cedis (about $50), up from 200 cedis (about $27) last year. Adding to the country’s financial woes, the credit ratings agency Moody’s downgraded its sovereign debt rating last month. Ghana’s debt stands at around 80 percent of GDP.
Ghanaians are not the only ones feeling the pressure; inflation in Nigeria is similarly high. The price of diesel fuel shot up 190 percent for Nigerians, as the country depends on imports despite being the continent’s biggest oil producer. (Nigeria has few refineries running at capacity, so it exports crude oil and imports almost all of its refined petroleum, including gasoline and diesel.) But Africa’s largest economy said it will keep interest rates unchanged while it focuses on economic growth. Nigeria opened a $2.5 billion fertilizer plant last week in an effort to make the country self-sufficient and gain significantly from exports during a global shortage.
Meanwhile, in Ethiopia, the price of fertilizer has increased 200 percent. And in Sudan, the cost of an average food basket has risen 700 percent in the past two years (Russia supplies more than 80 percent of Sudan’s wheat, and Ukraine over 7 percent). Tunisia, which is nearing state bankruptcy, has raised fuel prices twice in a month.
In Somalia, where severe drought has already forced 3 million people from their homes, aid agencies warn that more than half of the population is at risk of severe hunger this year, but critical funding and attention has been diverted toward the war in Ukraine.
Egypt’s government stepped in to set the price of bread produced by private bakeries for the first time in years after prices doubled. The Egyptian pound has also depreciated in value by almost 14 percent against the dollar as the country’s central bank raised interest rates and requested help from the International Monetary Fund.
For Ghanaians, like other Africans, there is growing unease about spiraling living costs, and officials are hoping that the lifting of COVID-19 restrictions could provide some boosts for businesses as venues return to full capacity in the country. On Monday, Ghana opened its borders to fully vaccinated visitors and suspended a mandate on wearing face masks.
“It has been a difficult two years for all of us, and we are seeing light at the end of a very long tunnel,” Akufo-Addo said on Sunday while also pointedly dismissing chatter in certain circles that another coup might be coming in West Africa and that a democratic bastion such as Ghana could be at risk. “I am confident that the great majority of Ghanaians who are committed to democratic values and democratic institutions will continue to resist the advances of coup plotters.”
The Week Ahead
Wednesday, March 30: South Africa’s parliament holds a vote of no confidence in President Cyril Ramaphosa.
U.S. Secretary of State Antony Blinken visits Algeria.
Thursday, March 31: OPEC and non-OPEC members meet virtually.
Thursday, April 7: Kenya’s treasury secretary presents the national budget for the 2022-23 fiscal year to parliament
What We’re Watching
Ethiopian cease-fire. Last week, Ethiopia’s government declared a unilateral truce in the 17-month civil war with rebellious Tigrayan forces, promising to allow aid into the blockaded northern region. More than 9 million people need food aid across northern Ethiopia, the United Nations says.
The breakthrough came the same week that the U.S. special envoy for the region, David Satterfield, and the African Union’s envoy, Olusegun Obasanjo, met with government and U.N. officials in Addis Ababa, Ethiopia’s capital. However, it remains unclear whether the latest deal, agreed to by both sides, will last. Diplomats had hoped a unilateral cease-fire announced last June by Prime Minister Abiy Ahmed could form the basis for a permanent peace resolution in the conflict but encountered resistance from both sides.
Writing in Foreign Policy, Getachew Reda, a member of the executive committee of the Tigray People’s Liberation Front (TPLF), said Tigrayans deserved the same international support as Ukrainians. Abiy’s government accuses the TPLF, which it classifies as a terrorist organization, of starting the war by attacking a federal army base. Fighting in Tigray has killed thousands of people and displaced more than 2 million, as reports emerge of horrific atrocities committed by all sides, including rape as a weapon of war, ethnic cleansing, and massacres.
Mali negotiations. West African leaders agreed on Friday to maintain sanctions imposed on Mali in January following military coups in 2020 and 2021. The region’s 15-nation bloc, the Economic Community of West African States (ECOWAS), proposed a maximum two-year transition to democratic rule instead of the four years that military leaders intend to stay in power.
Last Thursday, the court of the West African Economic and Monetary Union (UEMOA) ordered the lifting of separate economic sanctions imposed on the country. Bamako viewed those sanctions as illegal and vowed to challenge them in court, blaming them for a default on domestic debt last month.
UEMOA’s decision, however, does not affect the diplomatic freeze and air blockade imposed by ECOWAS, which expressed “deep concern” at the continued detention of former Burkina Faso President Roch Marc Christian Kaboré since a coup in the country in January. The bloc has also demanded an acceptable democratic transition timetable from Guinea’s military junta by April 25.
Zimbabwe by-elections. Zimbabwe’s ruling ZANU-PF party suffered a landslide defeat in parliamentary and local by-elections held on Saturday, despite President Emmerson Mnangagwa’s packed campaign rallies to shore up support. In polls seen as a dry run for the 2023 general elections, Nelson Chamisa’s Citizens Coalition for Change (CCC) party won 19 parliamentary seats out of the 28 contested.
Although ZANU-PF remained popular in rural areas, the majority of Zimbabweans have lost patience with the party over the government’s failure to effectively tackle the country’s deepening economic crisis. Mnangagwa, who succeeded Robert Mugabe, has been accused of preventing opposition rallies and intimidating detractors. Chamisa launched the CCC just three months before the election.
Israel summit. U.S. Secretary of State Antony Blinken sought to reassure allies in the face of fallout from Washington’s diplomatic efforts to revive the nuclear deal with Iran, which Israel and many Gulf states oppose. “Our commitment to the core principle of Iran never acquiring a nuclear weapon is unwavering,” Blinken said on Sunday at the rare two-day summit, hosted by Israel and attended by the foreign ministers of Egypt, Morocco, the United Arab Emirates, and Bahrain.
This Week in Tech
Togo’s COVID cash payments. In response to the pandemic, Togo’s government built, in just two weeks, an emergency digital cash transfer system to support a quarter of its adult population. The program, called Novissi, which means “solidarity” in the local Ewe language, launched in April 2020, shortly after the country identified its first coronavirus cases and lockdown restrictions forced many Togolese to stop working.
Authorities used, without face-to-face contact, a combination of satellite imagery, voter registration, and mobile phone data to identify the most vulnerable households in the 200 poorest districts and distribute over $22 million to date in relief aid via biweekly mobile money payments.
As a result of the program’s success, Togo is looking to digitize all government public and social services payments by 2025. “Togo’s mobile internet penetration rate reached 63 percent in 2020, compared to barely 13 percent five or six years ago,” Cina Lawson, Togo’s minister of digital economy and transformation, told the International Monetary Fund. “Leapfrogging is the only way to provide African solutions to African problems.”
Togo’s example could help other countries improve the targeting of assistance in future humanitarian emergencies, particularly in Africa, where mobile payments are convenient and popular.
Chart of the Week
Inflation is causing food and oil prices to soar across the continent, putting pressure on governments to find immediate quick fixes.
What We’re Reading
Kenya’s urban displacements. Nairobi’s new JKIA-Westlands expressway—a legacy project of President Uhuru Kenyatta that aims to connect the city’s business district to the capital’s international airport—is nearing completion, but the eviction of more than 40,000 people to make way for the new highway has been erased from mainstream discourse, argues Wangui Kimari in Africa Is a Country.
Kenya’s Vision 2030 development plan is likely to worsen the present scenario, she writes, in which the city’s poorest residents are being repeatedly displaced through violent, unjust, and often illegal evictions to make way for new infrastructure projects.
Nigeria’s impunity on wildlife crimes. An investigation by the Nigerian media outlet Premium Times has uncovered systematic failure in holding wildlife traffickers accountable. The authors analyzed hundreds of court records of law enforcement at five wildlife reserves between 2010 and 2021 and found that suspects in 52 out of 63 incidents over the last decade were either not arrested or charged. At ports, traffickers who ferried tens of thousands of metric tons of elephant tusks, rhino ivory, and pangolin scales worth several millions of dollars were mostly never traced.
Shifting cultural role of clothes in Egypt. In New Lines, the Belgian Egyptian writer Khaled Diab considers how contemporary perceptions on traditional clothing, especially in the Arab world, distort our view of history, resulting in inauthentic and often homogenous cultural attire. In past centuries, he writes, “It was men who provided the color in public spaces, strutting around like peacocks in their finest clothes, while the women, stripped of their finery, resembled peahens.”
Nosmot Gbadamosi is a multimedia journalist and the writer of Foreign Policy’s weekly Africa Brief. She has reported on human rights, the environment, and sustainable development from across the African continent. Twitter: @nosmotg
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